to achieve a five per cent growth rate by the year end.

Nguyen Thanh Phong, chairman of HCM City People’s Committee, speaks at a meeting on Thursday to review the socio-economic situation in the first half of the year. — Photo courtesy of HCM City Press Centre

Speaking at Thursday meeting on the city’s economic performance in the first half of the year, Nguyen Thanh Phong said: “HCM City will strive for growth of 5 per cent this year,” adding that the original growth target of more than eight per cent was too high.

The HCM City Development Research Institute has provided three scenarios for the city’s economic growth this year: three, four and five per cent.

The city’s economic growth reached only two per cent in the first half of the year, compared to an average of eight per cent in previous years, due to the impact of the outbreak, he said. 

He attributed the economic slowdown to the “decline in tourism revenue” and the “collapse of small- and medium-sized enterprises” due to the pandemic.

“The top priority is to help businesses maintain production and avoid bankruptcy, and prevent more workers from losing jobs,” he said.

He ordered the city departments of Planning and Investment, and Industry and Trade, and authorities of 24 districts to work with businesses to forecast the number of cancelled orders, the number of businesses shutting down, and the number of employees losing jobs.

Small and medium-sized enterprises, which account for 98 per cent of all enterprises, have been seriously impacted, he said.

More than 2,000 enterprises have closed permanently, while 7,257 suspended operations in the first five months (40 per cent up year-on-year) of the year.

The service sector, especially tourism and accommodations, accounting for more than 60 per cent of the city’s total budget revenue, has been hit hardest. 

The annual number of foreign tourists in recent years to the city has been about 8.6 million. They stay for an average of 3.5 days with an expenditure of $145-150 a day. However, the outbreak has caused a significant decline in visitors (of up to more than 90 per cent in some months).

Tasks for rest of year

Phong urged agencies to speed up disbursement of public investment capital in the remaining months. He set a target of disbursement of more than 80 per cent by October, and more than 95 per cent by the end of the year.

“Authorities in all 24 districts and the heads of departments are all responsible for the target,” he said.

Only VND18 trillion ($775.92 million), or 43.08 per cent of the planned public investment in the first six months, was spent, according to Phong.

For the second half, the city will continue to complete its dual goal of economic development and protection against the pandemic. The city will speed up major transport projects and improve its competitiveness to attract investment, he said.

The city will also promote domestic tourism and strengthen linkages with other provinces to develop the tourism sector. 

It will continue to focus on e-commerce, online businesses, non-cash payments for a digital economy, and support start-up creation and technological innovation. It will also promote the commercialisation of research products.

HCM City has been the mainstay of the nation’s economy, accounting for 27.6 per cent of the Government’s revenues in 2011-19. 

The city’s retail sales of goods and services fell 3.7 per cent, while industrial production rose by just 1.8 per cent in the first half. 

In the period, the city had more than 18,000 newly established enterprises with capital of more than VND246 trillion ($10.6 billion). The city attracted $2.01 billion worth of foreign direct investment in the period.

The EU-Vietnam Free Trade Agreement, slated to take effect from August 1, is expected to open opportunities for local enterprises to export to the EU market of more than 500 million people, he noted. VNS

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